1 A PROJECT REPORT ON LOANS AND ADVANCES THE MUSLIM COOPERATIVE BANK LIMITED PUNE SUBMITTED TO UNIVERSITY OF PUNE BY ARIF INNUS MUJAWAR MBA II IN PARTIAL FULFILLMENT OF THE REQUIREMENTS OF THE MASTER OF BUSINESS ADMINISTRATION (MBA) MCE’S ALLANA INSTITUTE OF MANAGEMENT SCIENCES PUNE – 411001 *2007 – 2009*
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Study on Loans & Advances at Muslim Co-Operative Bank by Arif Mujawar
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1
A
PROJECT REPORT
ON
LOANS AND ADVANCES
THE MUSLIM COOPERATIVE BANK LIMITED
PUNE
SUBMITTED TO
UNIVERSITY OF PUNE
BY
ARIF INNUS MUJAWAR
MBA II
IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS OF THE
MASTER OF BUSINESS ADMINISTRATION (MBA)
MCE’S
ALLANA INSTITUTE OF MANAGEMENT
SCIENCES
PUNE – 411001
*2007 – 2009*
2
C E R T I F I C A T E
This is to certify that the Project Report titled LOANS AND ADVANCES
is a work carried out by ARIF INNUS MUJAWAR student
of MBA – II of our Institute in partial fulfillment the requirements
of the MBA degree of the University Of Pune . He has worked
under our guidance and supervision .
Dr. K.K.SINGH Prof. Zafir Director Internal Guide
Date : Date :
Place : PUNE Place : PUNE
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D E C L A R A T I O N
This is to certify that the Project LOANS AND ADVANCES is entirely done
by me except taking into account the internal guidance under Prof. Zafir and
Mr. Amir Usman Magdum (Branch manager) Muslim Co-operative Bank Ltd.
it is an authentic effort put in by me.
ARIF INNUS MUJAWAR
(ALLANA INSTITUTE OF MANAGEMENT SCIENCES)
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A C K N O W L O D E G E M E N T
The preparation of this project report has been made possible through the direct
and indirect co-operation of various Organization , to whom I wish to express
S
my appreciation and gratitude.
I am grateful to Mr. AMIR USMAN MAGDUM (Br.Mgr.) for giving me the
opportunity to undertake my summer training in MUSLIM CO-OPERATIVE
BANK LTD. PUNE.
I am also thankful to the other employees of the organization who in their own
capacities have helped me to successfully complete my project.
I owe my profound gratitude to my Project guide Prof. Zafir for his
suggestions and guidance in the completion of this project report.
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EXECUTIVE SUMMARY
“THE STUDY OF LOANS AND ADVANCES ” was the project undertaken
as a part of the academic requirement of the two – year MBA course and
was conducted for MUSLIM CO-OPERATIVE BANK LTD. PUNE.
The main objective of project was to study the loan and advances provided
by the MUSLIM CO-OPERATIVE BANK LTD. PUNE and to comment on the
interest rates applied on different loans and advances.
This project aims at analyzing the issuance of different loans and advances
provided by MUSLIM CO-OPERATIVE BANK LTD. PUNE
The objective of the project was tounderstand the concept of loans and advances
rate of interest,sanction,security,maturity time , and formalities to be followed.
The project was carried out from 2nd
of June to 31st July 2008 under the guidance
Of Mr.Amir Usman Magdum (Branch Manger)
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INDEX
SR. NO.
TOPIC
PAGE
NO.
1 INTRODUCTION
a) Background of the study
b) Objectives of the study
c) Scope of the study
d) limitation
2 COMPANY PROFILE
a)Company History
b)Corporate overviews
c) c)Organizational Hierarchy
a)Chistor
3
THEOREITICAL FRAMEWORK
4 RESEARCH METHODOLOGY a) Meaning of research
b) Method of data collection
5 DATA ANALYSIS AND
INTERPRETATION
6 CONCLUSION
7 SUGGESTIONS
8 QUESTIONNAIRE
9 BIBLIOGRAPHY
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INTRODUCTION
Loans and advances are the most important aspect of any banking organization .
Loan is a type of debt. Like all debt instruments, a loan entails the
Redistribution of financial assets over time. The borrower initially receives
An amount of money from the lender, which they pay back , usually but not
Always in regular installment , to the lender . This service is generally
Provided at a cost , referred to as interest on the debt . A sum of borrowed
Money (Principal) that is generally repaid with interest . Loan – to –Value –
Ratio the relation between the amount of the mortgage loan and the appraised
Value of the property expressed as a percentage.
Lock lenders guarantee that the mortgage are quoted will be good for a specific
Number of days from day of application . Money Margin, the amount of a
Lender adds to the index on an adjustable ratio mortgage to establish
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The adjusted interest rate . ADVANCE is a term that describes a secured loan
Made to a member. Advances are offered at fixed or floating rates with specific
Maturities or with embedded options for early redemption .
There are different types of loan offered by a bank . Different loans fetch a
different rate of interest and have different securities against them.
CONSUMER LOANS
HOUSING LOANS
CAR LOANS
EDUCATION LOANS
LOAN AGAINST MORTAGE
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BACK GROUND OF THE STUDY
No one can say for certain where the history of loans began… it‟s likely that
people have been practicing lending and borrowing for as long there has been a
concept of ownership.
The history of loans and advances can be documented at least several thousand
Years back forms of lending were evident in ancient Greek and Roman times ,of
course… it is, however ,important to realize that lending started much earlier than
many people would imagine and has its origin in much older times .
Indentured loans
One of the early forms of lending that should be explored in the history of loans
Is the indentured loan (also known as indentured servitude,) Initially practiced
In the middle ages and through the 19th
century by landowners and the wealthy
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indentured servitude allowed poor individuals to borrow the money needed for
major expenses such as travel and real estate once the land owner or wealthy
individual had secured a ship passage or piece of real estate for an individual,
that would then have to work off real estate for an individual that individual
would then have to work off their debt over the course of several years….
unfortunately , many a times the land owner was very dishonest and would
greatly inflate the debt or would continue to add provisions to the debt long
after it had been repaid . Indentured servants often had very few rights, and
were seen by some wealthy individuals as a way to maintain slave labor long
after slavery had been abolished in both Europe and the United States.
Banking Loans
Luckily legitimate banks were developing even as indentured servitude was
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rampant. individuals known as money lenders played an important part in the
history of loans… in fact, it‟s from the Italian moneylenders of the middle
ages that we get both the English words “banks” and “bankrupt” that we use
today.
Indian moneylenders would set up benches in the local marketplace (with the
word for bench being “banca’ from which, we eventually derived the word
“bank” ) The moneylenders would charge interest on their loans at a rate
that they set, and would sometimes be quite successful and become very wealthy.
As an interesting side none to the history of loans, if the moneylenders were
not successful, though, theywould break up their benches and pursue other venues.
The Latin expression for breaking up benches in this way was “bnaca rupta” ,
(which carries a much steeper connotation than simply a broken bench .).
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Modern banking loans
Of course , the history of loans has progressed quite a bit from the days of
the middle ages moneylender. Interest rates are much more controlled , loan
terms have a much higher degree of fairness to them , and banks of out era
aren‟t out to simply get as much money out of borrowers as they can
The modern banks , finance companies , and online lenders that provide loan
to the public and private sectors provide a great service to the world economy,
and are regulated by both local and governmental policy so as to make sure
that nothing interferes with that service.
However , if not for some of the oppression and misdealing that was present
Through the history of lending then fairness and opportunity that exists in
Banking today might not be possible.. even the oppression that resulted from
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Indentured servitude in the past helped to establish modern banking by showing
What factors needed to be eliminated so as to benefit both lender and borrower.
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OBJECTIVES OF THE STUDY
To assess the different interest rate on the different loans schemes
Provided by the bank .
To study different loans provided by the bank.
To assess the total loans provided by the bank in a nutshell as well as
Individually that is car loan, housing loan, personal consumer loan and
Other schemes .
To study the process and formalities that needs to be completed
for acquiring the loan.
15
SCOPE OF THE STUDY
To be competitive in modern banking / corporate world , constant Capital flow
is essential. Whether to expand business or to relocate production
unit to some other place of cost effectiveness, you require finance is required.
It‟s not always possible to fund them through internal sources. A delay of a
few days can cost millions.
To make an your enterprise successful and to run a your business strategically,
a secured business loan is an option worth trying for. Life can take an adverse
turn at any moment. We can‟t be certain about our future responsibilities and
obligations. In an hour of need, we look for various options to raise money.
Many new ways have been evolved to raise money, but as a human being ,
we tend to rely on the most favored options. A secured loan provides easier and
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way to acquire loan. One can easily plan his future investments and
can easily fulfill his requirement and needs of life without risk.
Loan like housing loans, car loans, educational have helped people fulfill their
needs with ease.
BENEFIT TO THE LENDER
The lender of the loan gets the desired rate of interest on the amount
He/ she has borrowed.
The lender can plans his investment and can earn good
returns on the investment to be utilized in the future and can build a
good reputation in the market.
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BENEFIT TO THE BORROWER
The advantage with loans is that you can design your repayment period
as well as monthly installments according to your financial capacity .
A secured business loan comes at a lower interest rate when compared
with other business loans . As these loans are taken against collateral,
any default in repayment can put the commercial property at risk.
Interest rates offered on secured business loan is variable and easily
affordable. Such opportunities are provided to entrepreneurs to encourage
them and ultimately enhance the economy of the region. By promising
business or industries, local government can even eradicate unemployment
and improve overall standard of living.
18
LIMITATIONS
My research was limited because of the fact that the major source of data
was from the annual reports of the company, which were subject to accounting
policies and practices followed by the company.
The major limitations are :
Due to strict confidently policy of the company the accounts
departments provided only screened information.
Accuracy of the data provided cannot be guaranteed which does
Not give a clear idea about the actual functioning of the bank .
Due to busy schedule of advance manager , the companies ‟
financial statements obtain secondary data .
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ORGANIZATION
PROFILE
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The Muslim co-operative Bank was started in the year 1931. Earlier it was
a credit society , and then it converted itself into a co-operative bank in the year
1936 , registered and incorporated. Mr. Ramzan Umar Shaikh and Abdul Kadir
Ebrahim established the Muslim national co-operative bank in the year 1931
on May 25th
today the bank is officially recognized as “The Muslim co-operative
Bank Ltd.”
Important aspects of the Bank
The Bank has been established to focus on the local needs of the
communities specially the minority community, which is considered as
economically and educationally backwards.
To engage itself in creating awareness for saving by means of colleting
deposits and lending the same to the needy people of the minority
community.
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It is a voluntary organization open to all people irrespective of gender ,
social , political , and religious persuasion.
The tradinational role of the bank is to provide financial intermediation
between the depository and the borrower.
The Muslim co-operative Bank has in all 18 branches in the main areas of
Pune city at camp, Raviwar Peth , Kondwa , Hadapsar, Wanwori and
Yerewada etc. and also in other cities at Sangamner, Baramati Mumbai
and Junnar branch. The Muslim co-operative bank has
main administration office at Bhavani peth. Pune 42, which is considered
as powerhouse, and it has its registered office at Raviavar Peth Pune 42
22
KEY FEATURES OF THE
MUSLIM CO-OPERATIVE BANK
The Muslim co-operative bank has 3 of its branches working 12 hours
daily from 8.3o a.m. to 8.30 p.m. These branches are the main head office,
camp branch , M.G. road, Mominpura branch and works for 365 days.
The bank achieved a great position in the field of banking by securing
0%Net N. P. A. for the session 2005-2006.
The bank felicitate the children of there staff which secure 70 % and
above in their exams.
The Muslim co-operative banks provides educational allowances to the
children of the employees.
The Muslim bank has also started a 24 hours service branch along with
additional services to the customers and thus at that time it was called
“THE NEVER SLEPPING BANK”.
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The Muslim bank is fully computerized at all the branches with the latest
technologies and software used in the banking sector.
The bank provides other services such as safe deposit vaults, issue of
D.D. at any place within Maharashtra under Mutual arrange scheme and
PLR on fixed and floating basis minimum at 8 %.
The bank also provides facility of Non –Resident external Rupee account
and non-Resident ordinary account facility.
24
OBJECTIVES OF THE BANK
To promote good and fair banking practices.
To promote cordeal relation between the customer and bank
To foster confidence in the banking system.
25
THE MUSLIM CO-OPERATIVE BANK LTD., PUNE
ORGANISATIONAL HIERARCHY
CHAIRMAN
Mr. Shaikh Shafi F.M. Delhiwala
Vice Chairman
Miss Mumtaz Z. Sayed
SECRETARY – C.E.O.
J. L .Mandrupkar
Co-opted Director
Taslim Khan Staff – Director
Imtiyaz Mulla
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THEORETICAL
FRAMEWORK
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Different types of loans provided by Muslim Co-Operative Bank Ltd.